Pentagon dodges major cuts as Senate panel approves $513B spending bill

The Pentagon dodged major budget cuts Tuesday as a Senate subcommittee approved a $513 billion appropriations bill for 2012.

The legislation, approved by the Senate Appropriations Defense subcommittee, would give the Pentagon the same amount of money it received in 2011, and is only $26 billion less than what the White House proposed in its February budget.

Since then, a deal to raise the federal debt ceiling cut the Pentagon’s coffers, and the defense industry is worried more cuts could be on the way from a debt supercommittee that met for its first business meeting on Tuesday.

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The subcommittee voted unanimously to send the measure to the full panel, passing provisions to slash F-35 funding by $695 million and cancel a multibillion-dollar combat vehicle initiative being developed by the Army and Marine Corps.

The Senate subcommittee also unanimously approved a $117.8 billion war-funding measure.

The House already approved a $530 billion Pentagon spending bill, meaning a bicameral conference committee will have to reach a compromise.

At a different Senate panel hearing, the likely next deputy Defense secretary promised DOD officials soon would provide recommendations on how to implement other funding cuts.

Ashton Carter, the current Pentagon acquisition chief, told the Senate Armed Services Committee that a comprehensive review of military and national security strategy and needs will be completed by the end of the year.

But some senators suggested that would be too late for the supercommittee, which must complete its work by Nov. 23 at the latest.

Both Senate Armed Services Committee Chairman Carl Levin (D-Mich.) and Sen. John McCain (R-Ariz.), in the hearing’s roughest moments, bluntly told Carter that the panel needs DOD input on how to implement additional cuts.

McCain said he had been told the review would not be complete until next year, a scenario he said was “unacceptable.”

Levin said his panel needs Pentagon information on how it would implement the debt deal's $350 billion in proposed cuts, and on the impact an additional $600 billion in cuts would have on the department. Those cuts are triggered by the debt-ceiling deal if the supercommittee doesn’t reach a deal on $1.2 trillion in cuts, or if Congress doesn’t accept that deal.

Levin said the panel needed this information before it gives recommendations to the supercommittee in mid-October.

While the defense industry is fretting over future cuts, major contractors and the services appear to have mostly dodged a bullet from Tuesday’s bill, though a few high-profile programs will see reductions.

The Senate subcommittee's bill would cut $695 million from the troubled F-35 program, leaving the program with an $8.5 billion budget.

The panel noted the Lockheed Martin-made F-35’s test effort is only 10 percent complete, “yet the [Pentagon's] request continues to ramp production of aircraft in fiscal years 2012 and 2013,” according to the summary.

The panel's bill would freeze production levels at the 2011 rate through 2013 to limit cost growth, the subcommittee said.

Subcommittee member Rep. Kay Bailey Hutchison (R-Texas) raised concerns about the F-35 proposal, saying she worries buying fewer each year will drive up costs. But, since the Pentagon plans to increase production in 2014, "I think this will end up being fine," she said.

Pointing to “excessive cost growth and constantly changing [performance standards],” the subcommittee said it would cancel the Army and Marine Corps’s Joint Light Tactical Vehicle (JLTV) program.

The panel concluded the two services’ needs could be met through alternatives, including upgrading the current fleet of Humvees.

Analysts have pegged the value of a JLTV contract at above $20 billion.

If included in the final version of the bill, the canceled JLTV contract would be a setback for defense firms Lockheed Martin and the teams of General Dynamics and AM General, as well as BAE Systems and Navistar, which have all pursued it.

“While this was not an easy allocation to meet, I can assure you that this recommendation takes care of our men and women in uniform and their families, fully supports military readiness, protects the forces and maintains our technological edge,” Senate Appropriations Committee Chairman Daniel Inouye (D-Hawaii) said. “It complies with the earmark moratorium and contains no congressionally directed spending items.”

The subcommittee followed other congressional defense panels by adding funds — $240 million — that would allow the Army to keep its Abrams tank production line running.

The service had proposed taking a break and later restarting that line, but lawmakers objected, saying the break would lead to higher costs.

The Senate subcommittee also added $500 million to buy equipment for the National Guard and Reserves, and added $250 million for upgrades the Pentagon says are needed to make the blast-resistant vehicles purchased for Iraq and Afghanistan more survivable.

Some pro-defense lawmakers, almost all of them House Republicans, have questioned whether additional Pentagon budget cuts would leave the military unable to perform future missions.

Inouye rejected that criticism, at least so far as his subcommittee’s bill was concerned.

Subcommittee leaders “have taken extra caution to protect readiness funding in the bill,” he said. “Reductions recommended in our operations and maintenance funds come almost exclusively because of lax budgeting practices by the military departments.”

The panel's summary document also notes some of its cuts came out of a $10 billion pool the military services have said they “no longer require.”


—This story was posted at 12:20 p.m. and updated at 2:57.

This story was corrected at 3:15 p.m. due to an error in a statement released by the committee. 

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